The Financial Conduct Authority has added its voice to a chorus of warnings that overlapping European rules on derivatives reporting will intensify the confusion market participants are already facing as a result of new reforms coming into force today.

The UK regulator was one of a number of respondents to a European Parliament consultation on the coherence of post-crisis financial services legislation held last year. Responses to the consultation were made public on Tuesday.

The reporting of swap trades was one of three reforms agreed by G20 leaders in 2009 with the aim of reducing systemic risk in the $692 trillion over-the-counter derivatives market.

Up until now, OTC derivatives markets have operated privately between counterparties, allowing risk to build up away from regulatory scrutiny.

The FCA response said: “This potentially leads to double reporting and differences in information reported, which makes it harder for national competent authorities (NCAs) to use the information and is burdensome and expensive for firms. In order to avoid confusion for firms and NCAs we would suggest that all reporting requirements on financial instruments are considered together and rationalised.”

Similar concerns were echoed by the French financial regulator L'Autorité des Marchés Financiers, UBS, State Street, UK buyside trade body the Investment Management Association and the FIA European Principal Traders Association, which represents proprietary trading firms.

Remco Lenterman, chairman of the FIA EPTA, said firms trading listed derivatives now have to report three times: to the exchange that lists the contract, to the national regulator under Mifid rules, and to newly-created trade repositories under EMIR.

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UBS noted that the different methods of reporting specified in the regulations would make it “impossible” to automate reporting, adding: “This is clearly inefficient and does not...increase transparency or make the available information more useful for its intended users."

A spokesman for Esma said the securities regulator may look for a more harmonised approach to reporting requirements under Mifid and Emir in the near future.

Many firms have been scrambling to meet today’s deadline, especially infrequent users of derivatives like corporate firms and smaller investment managers that may not be fully aware of how and what to report.

As well as the operational and legal challenges associated with reporting trades, there are also differences among national regulators that ultimately have oversight for the reporting rules.

John Wilson, global head of OTC clearing at Newedge, said: “Not only do we have overlapping pan-European rules, but there are also contradictory and inconsistent requirements from national regulators when it comes to reporting, such as what constitutes an FX forward.”

A spokesman from the FCA said the regulator recognises the challenges and that it would be “proportionate in our response to any instances of non-compliance”.

The spokesman added: “Our initial focus will be solving any reporting problems and helping the industry meet the new standards. Firms should however recognise that non-compliance could lead to enforcement action.”

--write to apuaar@efinancialnews.com and follow on Twitter: @anishpuaar